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Is unlimited data making a comeback?

Within the span of about 20 hours, both MetroPCS (NYSE:PCS) and T-Mobile USA announced new unlimited data plans for smartphones. The launches are essentially an attempt by both carriers to reinvigorate their brands by attacking the tiered data pricing they argue consumers don't understand and don't want.

MetroPCS' new "4G LTE for All" is the carrier's latest tweak to its unlimited voice, texting and LTE data plan. MetroPCS in April raised the price of its unlimited LTE service to $70 from $60, and yesterday the carrier announced a limited-time promotion during which it will offer unlimited voice, texting and LTE data for just $55 per month.

T-Mobile's new "Unlimited Nationwide 4G Data" plan is even more notable. The carrier will offer unlimited data for $30 per month (on a subsidized device) in addition to its existing tiered data plans--the catch is that tethering will not be included in the unlimited plan.

Both T-Mobile and MetroPCS are hoping the allure of unlimited data will reverse their sliding positions in the market. Overall, T-Mobile lost a net 205,000 subscribers in the second quarter and MetroPCS lost 186,000 net customers.

Interestingly, the launches signal a reversal of sorts in an industry that for several years now has been moving toward a tiered data pricing structure. AT&T Mobility (NYSE:T) in June 2010 was at the forefront of the charge when it replaced its $30 per month unlimited smartphone data offering with a tiered service, where it charged customers $15 per month for 200 MB and $25 per month for 2 GB (those tiers have since evolved to stretch across a much wider range of data and prices). In subsequent months Verizon Wireless (NYSE:VZ), T-Mobile and others followed AT&T's lead with the introduction of data buckets and various overage penalties, including extra charges and speed throttling.

Overall, tiered data was a response to dramatic increases in smartphone users' data traffic--tiered data plans helped to reduce the total amount of subscribers' data and allowed operators earn more money from heavy data users. It was no coincidence that AT&T's new tiered data plans went into effect the same day Steve Jobs unveiled the iPhone 4.

So why is unlimited data making a comeback?

Mark Lowenstein, managing director of Mobile Ecosystem and a FierceWireless contributor, explained that unlimited data offerings can help wireless carriers get their foot in the door with consumers, and set them apart from their competitors. Unlimited data "starts the conversation," he explained, noting that consumers will then evaluate the other aspects of the providers' service.

Also, T-Mobile and MetroPCS today have a much better understanding of smartphone customers' data traffic patterns, and both carriers are working to add capacity to their networks. They likely believe they won't be surprised by the spike in usage generated by an unlimited data offering.

Finally, Lowenstein explained that wireless carriers are working to sell smartphones to the remaining 50 percent of American wireless users who still own feature phones. AT&T and Verizon are hoping their new shared data plans will entice customers to upgrade to smartphones, while T-Mobile, MetroPCS and others are hoping to tempt new users with the promise of unlimited wireless data.

Of course, Sprint Nextel (NYSE:S) is the one major wireless carrier that has retained its unlimited data offering despite a trend toward tiered data. The result, partially due to Sprint's Simply Everything plan, has been a gradual improvement in Sprint's metrics.

However, T-Mobile's re-emergence in the unlimited data scene could put extra pressure on Sprint as the two carriers compete for customers who don't want to keep track of how many videos they watch per month.

What remains unclear, though, is exactly how big the unlimited data opportunity is. The postpaid market overall is slowing, and Verizon and AT&T continue to sign up new customers to their respective tiered data plans. Will the unlimited offerings from T-Mobile, Sprint and others divert customers from the Big 2? Based on Sprint's performance so far--including several quarters of selling the iPhone with an unlimited data plan--I don't think there's a huge, pent-up demand for unlimited data. I think those looking to compete with the Big 2 (AT&T and Verizon) need to do more than roll back the clock a few years. +Mike Dano